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Why the Slow, Painful Death of the Food Safety Bill is Bad News for the Food Industry

A baffling mix of political bumbling, partisan bickering and a parade of interest group lobbying has killed the food safety reform bill that's been languishing in Congress for over a year now. Normally, relief from additional regulation is heralded as a good thing for big companies, but in this case there's no cause for celebration.

For most of 2010, Senate bill 510, which would have given the FDA expanded authority to inspect high risk facilities and would have required all food processing and storage facilities to have their own control plans, was like a patient waiting expectantly for a new kidney. Countless times, Senate Majority Leader Harry Reid said a vote on food safety, which amazingly has bipartisan support, was right around the corner. He even made promises directly to people who've suffered horribly from eating contaminated food. But late last week, the news came that there would be no new kidney.

There's still a slim chance that the bill, which has already been passed in the House, could be revived in the so-called lame duck Congress that convenes after November's election. There's also hope for revival if the balance of power in Congress doesn't shift after the elections. But given what pollsters are saying about Democrats losing seats, don't hold your breath for that one.

All this is bad news for the food industry because ongoing food contamination problems are eroding consumer confidence, to the point where a 2009 IBM survey found that less than 20% of Americans trust food companies to develop and sell products that are safe and healthy. Massive recalls also serve to motivate people to seek out locally grown, unprocessed foods, which doesn't help big food companies at all. The National Gardening Association reports that 7 million more households said they planned to grow their own fruits, vegetables or herbs in 2009, a 19% increase over 2008. One of the biggest motivators: concern about the safety of mass produced food.

Plus, there are the short-term costs associated with massive recalls. In 2009, the Georgia Peanut Commission estimated that the salmonella-contaminated peanut butter mess would cost peanut producers $1 billion in lost production and sales. Kellogg (K), which makes several brands of recalled peanut butter crackers, said it lost $70 million because of the outbreak.

One indication of how broken America's food safety system is comes from the fact that industry groups like the Grocery Manufacturers Association, the National Restaurant Association and the Food Marketing Institute, which represents grocery stores, wholeheartedly support the idea of more and better regulation. At least they support it so long as an amendment banning the controversial chemical Bisphenol-A is MIA.

As for who's to blame for killing the biggest reform of food safety laws since 1938, the NYT fingered Republican Senator Tom Coburn from Oklahoma for refusing to go along with Harry Reid's plan to squeeze the bill into the Senate's tight pre-recess schedule by holding a vote without debate. Of course, Reid himself deserves considerable blame for not summoning the political leadership to get the bill to a vote before the 11th hour. Small farm groups also continue to oppose the bill unless it includes an amendment from Montana Democratic Senator and organic farmer Jon Tester that would exempt small producers that market directly to consumers, stores and restaurants. Most outbreaks and recalls happen at large producers, or what Tester devotees call "corporate bad actors."

Regardless of who's to blame, one thing's for sure. Without new laws strengthening food safety, Americans are going to continue learning about more roach-laden peanut butter plants and manure-infested hen houses. Lots more.

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